I did this....it really turned out beautifully. We used q-tips to blend and did the painting on #140 watercolor paper. Also you can dip the oil crayon in the baby oil to get a stronger effect.

If one has used the new crayola water-soluble "oil" crayons, those are beautiful and very creamy. You can get the same effect but using water. The clean up is way easier too! The kids love love love using this medium!!!